The euro fell slightly on Tuesday. In North American trading, EUR/USD was trading 0.17% lower at 1.0703.
Eurozone GDP rises, inflation falls
In the first quarter, the euro area economy grew by 0.3% compared to the previous quarter, the highest growth rate since the third quarter of 2022. This follows flatness in the fourth quarter of 2022 and exceeded market expectations of 0.1%. On an annualized basis, the economic growth rate was 0.4%, up from 0.1% in the fourth quarter of 2022 and higher than market expectations of 0.2%.
Germany, the eurozone's largest economy, saw its GDP increase by 0.2% in the first quarter compared to the previous quarter, up from the revised -0.5% figure in the fourth quarter and beating market expectations of 0.1%. exceeded. However, every year, the economy decreased by 0.2% for two consecutive quarters, indicating that the economy has entered a technical recession.
Eurozone inflation fell to 0.6% month-on-month in April, in line with expectations and down from 0.8% in March. The annual inflation rate remained unchanged at 2.4%, in line with market expectations. Core inflation was 2.7%, down from 2.9% in March, but above market expectations of 2.6%.
The ECB's interest rate cut plans are unlikely to change at the June Governing Council meeting following improved eurozone GDP statistics and a slight decline in inflation. It is unclear what will happen after that. Some Governing Council members have called for up to three rate cuts this year, but the ECB will need data to help it launch a series of cuts.
The US is scheduled to release major employment statistics later this week, starting with the ADP jobs report. Although this announcement is not considered an accurate indicator of nonfarm payrolls, March's ADP acceleration was also repeated by nonfarm payrolls, which increased by a significant 303,000 people. ADP is expected to be 179,000, down slightly from 184,000 in March.
EUR/USD technical
- There is resistance at 1.0756 and 1.0819
- 1.0690 and 1.0627 are supported.
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